On 8 April 1994, the day that Kurt Cobain's body was discovered in his Seattle home, sparking the biggest rock news story of the decade, local journalist Charles R Cross picked up the phone to hear CNN's Larry King bellowing: "Tell me, what is grunge music?" It's still a good question, and one with many answers. Like any musical genre, grunge's borders are fuzzy and disputed. Unlike previous chroniclers of Seattle's rock scene in the late 80s and early 90s, Cross included, Mark Yarm lets his interviewees do all the axe-grinding. In one entertaining chapter, tellingly titled "Create Your Own Myth", a string of participants offer competing explanations for the name's origin. The influential record producer Jack Endino concludes: "No one fucking knows, and frankly, I don't think anyone really wants to take credit for it."

This Rashomon-like approach, inspired by Legs McNeil and Gillian McCain's 1997 book Please Kill Me: The Uncensored Oral History of Punk, is probably the smartest way to examine something as tangled and turbulent as a regional music scene. This isn't a history but many histories, overlapping and often conflicting: a patchwork of imperfect memories, retrospective insights, time-burnished anecdotes and reheated grievances. When pre-fame Nirvana guitarist Jason Everman is asked whether he jumped or was pushed, he replies: "I guess that's a matter of perspective. You can believe what you want to believe." It would make a good epigraph for this book.

One thing, at least, is beyond dispute: when grunge upended mainstream rock in late 1991 with Nirvana's Nevermind, swiftly followed by the emergency of fellow Seattleites Pearl Jam and Soundgarden, it also changed US alternative music irrevocably, and not necessarily for the better. Shortly afterwards, Cobain was harangued by two mohawked teens shouting: "You killed punk rock!" He didn't disagree. But if you want deep sociocultural analysis of how the soggy, depressing and then-unfashionable Pacific north-west wrought such a sea change and what it meant, then look elsewhere. Everybody Loves Our Town is basically a flannel-shirted soap opera, where sex, drugs, ego and money (or the lack thereof) wreak such colourful havoc that you wonder how anyone found time to make records, let alone a handful of great ones.

Considering grunge's reputation for gloom – "complaining set to a drop D tuning", quips DJ/journalist Jeff Gilbert – many of the key figures were goofily irreverent, with a love of excess (a typical anecdote ends: "I think there were psychedelics involved") and print-the-legend myth-making. It turns out that grunge's untutored blue-collar reputation – reductive at best for a scene that included college graduates, Shirley Temple's daughter and a teenage prodigy who once played jazz drums at the White House – was deliberately fostered not just by journalists but by the men behind pivotal label Sub Pop. "I just thought it was hilarious that everybody lied," says British critic Everett True. During the post-Nevermind media fever, when even Vogue ran a spread on grunge fashion, Mudhoney's Mark Arm mischievously fed the New York Times a list of bogus grunge slang including "swingin' on the flippity-flop" (hanging out) and "harsh realm" (bummer).

In your standard rock narrative, there is a middle phase of joyous success before the hubris, unravelling, and so on, but grunge entered the harsh realm almost overnight. Within months of Nevermind's release, backbiting was rife, drug habits were burgeoning and flights from LA to Seattle were stuffed with A&R men scooping up bands such as the inauspiciously named Flop. It seemed like every group suddenly wanted to sound and look like Nirvana, except Nirvana themselves. Even as Cameron Crowe's 1992 movie Singles celebrated the Seattle scene, Mudhoney's typically sardonic contribution to the soundtrack, "Overblown", sought to bury it: "Everybody loves our town/ That's why I'm thinkin' lately/ Time for leavin' is now." Most music scenes are at their best in the darkness of relative obscurity but Seattle's burned up unusually fast on exposure to light: an unstable compound. One thinks of the description of Nirvana's messy "Smells Like Teen Spirit" video shoot: "The thing was never integrated enough to disintegrate."

Careful though Yarm is to chronicle those bands, like Cat Butt and the Gits, who were never destined for Time cover stories, the book's dramatic centre was always going to be Cobain and his wife, Courtney Love, a character who could start a war in an empty room. By this stage in the narrative, the playful misinformation celebrated by Everett True has curdled into savage disputes over Cobain's brief, tormented spell as America's biggest rock star. "How do you know when Courtney Love is lying?" asks Buzz Osborne of the Melvins. "Her lips are moving."

One occasionally longs for some subtle, square-bracketed authorial intervention to clarify certain specialist references and steer readers through the thicket of Matts and Mikes, Daves and Dans, but Yarm stands firmly back from the narrative hubbub. The most moving sections collage multiple responses to deaths in the scene, of which there were far too many. Cobain's suicide produces a remarkable, where-were-you-when-you-heard-the-news reunion of dozens of scattered characters, which rams home how much had changed in less than three years. That was the moment when the Seattle scene was frozen in the media's klieg lights and the myth of Cobain as doomed genius ne plus ultra towered over everything else. As Sub Pop publicist Nils Bernstein reflects: "When you live it and then you see how it's covered, you're like, Wow, that's not accurate, or Oh, the feeling of this was different from how they portrayed it… It makes you question history." The great virtue of Yarm's babel of voices is that it allows scores of other stories to be told and retold without judgment. You, the reader, can believe what you want to believe.

Twenty years ago an album that wreaked havoc on the conventional music industry was released. Lauren Spencer, who was among the first to hear Nevermind, reminisces with the surviving band members, and returns to Seattle to hear how Kurt Cobain changed music for ever